Europe, Credit Rating Downgrade | featured news

Moody's Investors Service has downgraded France's government bond rating, citing the country's weak economic growth outlook and its exposure to Europe's economic crisis.

Fitch cut Greece's long-term ratings on Wednesday to its lowest rating above a default, becoming the first ratings agency to make the widely expected downgrade after the country announced a bond exchange plan to ease its massive debt burden.

Financial markets are unlikely to be derailed by mass euro zone downgrades but with Greek debt talks at an impasse, pressure has been loaded on the bloc to shore up its defenses and glimmers of optimism from last week have been firmly doused.

In Spain, the prime minister pledged spending cuts and a banking-system cleanup, while in Italy, the prime minister called for “efforts in favor of growth.”

Standard & Poor's ratings agency has downgraded France's credit rating, French television channels reported on Friday, citing a government source.

Monday's euro-zone downgrade warning by Standard & Poor's Ratings Services is a muscular move by a firm that was pilloried for its supposed laxity in the financial crisis. S&P put the long-term sovereign-debt ratings of 15 euro-zone nations, including struggling Italy and Spain, on negative watch. That typically means there is at least a 50% chance of a downgrade within 90 days, but the firm said Monday that it expected to announce any rating changes "as soon as possible" following this week's European Union summit, where policy makers are expected to lay out plans to enforce stricter budget rules.

Stock indexes gave back some of their gains Monday and the euro turned lower against the dollar following a report that Germany and five other major European nations could risk having their credit ratings downgraded.